10-QPeriod: Q2 FY2017

CITIGROUP INC Quarterly Report for Q2 Ended Jun 30, 2017

Filed August 1, 2017For Securities:CC-PNC-PR

Summary

Citigroup Inc. reported solid results for the second quarter of 2017, with total revenues increasing by 2% year-over-year to $17.9 billion. This growth was driven by a 6% increase in the Institutional Clients Group (ICG) and a 5% increase in Global Consumer Banking (GCB), partially offset by a significant 45% decrease in Corporate/Other revenues due to the ongoing wind-down of legacy assets. Net income for the quarter was $3.9 billion, or $1.28 per share, a slight decrease of 3% from the prior year's $4.0 billion, primarily due to higher credit costs and operating expenses, and a higher effective tax rate. However, earnings per share saw a 3% increase due to a 6% reduction in outstanding shares, reflecting capital returns to shareholders. The company generated approximately $4.7 billion in regulatory capital during the quarter and returned $2.2 billion to shareholders through buybacks and dividends. Citigroup's regulatory capital ratios remained strong, with a Common Equity Tier 1 Capital ratio of 13.1% under full Basel III implementation. The company also received no objection from the Federal Reserve Board on its capital plan as part of the 2017 CCAR, intending to return $18.9 billion to common shareholders over the next four quarters.

Financial Highlights

38 data points
Beta

Revenue

$18.16B

Net Income

$3.87B

21.3% Net Margin

EPS (Diluted)

$1.28

Total Assets

$1.86T

Cash & Equivalents

$186.08B

Free Cash Flow

-$19.42B

Financial Statements
Beta
Revenue$18.16B
Operating Income$7.96B
Interest Expense$4.04B
Net Income$3.87B
EPS (Basic)$1.28
EPS (Diluted)$1.28
Shares Outstanding (Basic)2.74B
Shares Outstanding (Diluted)2.74B

Key Highlights

  • 1Total revenues increased 2% to $17.9 billion.
  • 2Net income was $3.9 billion, or $1.28 per share, down 3% from the prior year.
  • 3Institutional Clients Group (ICG) revenues grew 6%, driven by strong banking performance.
  • 4Global Consumer Banking (GCB) revenues increased 5%, with strong performance in cards.
  • 5Operating expenses increased slightly to $10.5 billion, impacted by higher volume-related expenses and investments.
  • 6Provisions for credit losses increased 22% to $1.7 billion, primarily due to higher net credit losses in consumer banking.
  • 7Common Equity Tier 1 Capital ratio remained strong at 13.1% (fully implemented Basel III).

Frequently Asked Questions

Citigroup's net income decreased by 3% to $3.9 billion in the second quarter of 2017 compared to $4.0 billion in the prior-year period. However, earnings per share increased by 3% to $1.28, largely due to a 6% reduction in the average number of shares outstanding.

Total revenues increased by 2% to $17.9 billion. The Institutional Clients Group (ICG) saw a 6% revenue increase, primarily driven by strong performance in banking, particularly investment banking. The Global Consumer Banking (GCB) segment also grew, with a 5% increase in revenues, led by strong performance in cards, notably benefiting from the Costco portfolio acquisition.

Citigroup generated approximately $4.7 billion in regulatory capital during the quarter and returned $2.2 billion to common shareholders through share repurchases (approximately 29 million shares) and dividends. The company's Common Equity Tier 1 Capital ratio was a healthy 13.1% (fully implemented Basel III). Furthermore, Citigroup received no objection to its capital plan from the Federal Reserve Board in the 2017 CCAR, indicating plans to return $18.9 billion to shareholders over the next four quarters.

Provisions for credit losses increased by 22% to $1.7 billion. This rise was primarily driven by higher net credit losses, particularly in the consumer banking segment, which saw an 11% increase. The increase in consumer net credit losses was largely attributed to the Costco portfolio acquisition, organic volume growth and seasoning in the North America cards business.